http://g4tv.com/thefeed/blog/post/696571/Spyborgs-Developer-Bionic-Games-Confirms-Layoffs.html

(edited for brevity)

I heard unfortunate news from multiple sources today that Bionic Games, the studio working on Spyborgs, had shut down due to a financial dispute with Capcom. These rumors, however are not true, the company's president said.

"I am the president of Bionic and I assure you that the team is in the studio today fixing bugs and waiting for any requests from Capcom or  Nintendo of America," said Haller in an e-mail. "You are invited to come over and see for yourself."

 I wondered why I'd heard the rumor it the first place. My sources were credible members of the industry. They may have been misinformed about the specifics, but they weren't lying about some major changes happening at Bionic Games. Haller admitted there was a reason I have heard something: layoffs.

"On Friday," he explained, "we began moving team members to other projects and laying off those for whom we do not have an immediate position. This is normal at every development studio that I am familiar with. This is probably what sparked the rumor."

I asked Haller to provide the exact number of folks laid off, but he didn't clarify.

Haller did assure Spyborgs is successfully nearing the end of development and categorically denied that Capcom was delinquent in paying Bionic Games. The reality is that Bionic Games could not sustain its full development staff.

"Last week, we completed our Beta delivery [of Spyborgs] to Capcom," he said. "We now only need a small team to handle any bugs that might pop up over the next month or so. The game is for all intents and purposes finished and delivered. Capcom has been consistent on all of their payments to us over the entire development period."

In fact, the studio is already moving forward with another project, Haller admitted.

"We are six months into our next major game and we expect to begin building out the team again once our prototype is accepted," he said.

I'm thankful the original reports I heard about Bionic Games' future were not true, but folks were laid off as part of the studio's transition.

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I usually don't subject myself to G4TV/X-Play stuff, but I found this interesting. I wonder as to where their new game is going and what it is.  Good to know Capcom isn't skimp with the money either. Bionic Games should work more efficiently know that they have cut the fat out of their roster.

Stuff like that scares me since I'm going into the game biz, but I guess its just the way of life.

I'm pretty sure a lot of studios don't do that. Nintendo doesn't.

Even with those that do you probably get a redundancy package which gives you a few months of normal living until the next position appears.

That's a problem with smaller studios.  Large studios have several projects going on at once, and have staggered releases; when a project is winding down, people are taken off and put on projects that are ramping up.  For smaller studios with only a couple of projects on the go, you can end up in a situation where the wind down is bigger than the ramps up of the other project, and people are left on the bench; since its expensive to keep people around that do nothing, especially for small companies, they are laid off until they are needed again.

Oh, alot of studios do that. they hire alot of people when they are making games. then when they are done they let them go